Sameeksha Desai

Measuring Entrepreneurship in Developing Countries

This paper discusses the difficulties associated with measuring entrepreneurship in developing countries. Three important dichotomies in the research on entrepreneurship are discussed: formal-informal, legal-illegal, and necessity-opportunity. Several common measures of entrepreneurship are outlined along with their relevance to developing countries, including self-employment, Global Entrepreneurship Monitor data, World Bank Group Entrepreneurship Survey data and OECD data. The implications of the current understanding of entrepreneurship are discussed with respect to institutions and economic development.

A Theory of Destructive Entrepreneurship

Policy interest since the early 1980s has focused in different ways on the creation of a large, productive, taxable economy - in which entrepreneurship plays a role for employment, income growth and innovation. The current understanding of various forms of entrepreneurship remains incomplete, focusing largely on productive and unproductive entrepreneurship. However, destructive entrepreneurship plays an important role in many, if not most, economies. This paper addresses the conceptual gap in the allocation of entrepreneurship by proposing a theory of destructive entrepreneurship.

What Does 'Entrepreneurship' Data Really Show? A Comparison of the Global Entrepreneurship Monitor and World Bank Group Datasets

This paper compares two datasets designed to measure entrepreneurship. The Global Entrepreneurship Monitor dataset captures early-stage entrepreneurial activity; the World Bank Group Entrepreneurship Survey dataset captures formal business registration. There are a number of important differences when the data are compared. First, GEM data tend to report significantly greater levels of early-stage entrepreneurship in developing economies than do the World Bank data. The World Bank data tend to be greater than GEM data for developed countries. Second, the magnitude of the difference between the datasets across countries is related to the local institutional and environmental conditions for entrepreneurs, after controlling for levels of economic development. A possible explanation for this is that the World Bank data measure rates of entry in the formal economy, whereas GEM data are reflective of entrepreneurial intent and capture informality of entrepreneurship. This is particularly true for developing countries. Therefore, this discrepancy can be interpreted as the spread between individuals who could potentially operate businesses in the formal sector - and those that actually do so: In other words, GEM data may represent the potential supply of entrepreneurs, whereas the World Bank data may represent the actual rate of entrepreneurship. The findings suggest that entrepreneurs in developed countries have greater ease and incentives to incorporate, both for the benefits of greater access to formal financing and labor contracts, as well as for tax and other purposes not directly related to business activities.

Connecting the Study of Entrepreneurship and Theories of Capitalist Progress: An Epilog

In the beginning was the corporation. Or so it seems, as it is pointed out in the first chapter of this handbook. However, the “modern industrial corporation” is a relatively recent invention in historical terms. Chandler (1990) dates its emergence to the last-half of the nineteenth century, when advances in transportation and communications both enabled and demanded the formation of large corporations managed by professionals. Such corporations came to represent the engines of national economic growth and of individual wealth creation in countries whose very membership in the group of industrialized nations speaks to the success of this organizational form (Acs, Introduction, this volume; Baumol, 2002).

The Entrepreneurship-Philanthropy Nexus: Nonmarket Source of American Entrepreneurial Capitalism

What differentiates American capitalism from all other forms of industrial capitalism is a historical focus on both the creation of wealth (entrepreneurship) and the reconstitution of wealth (philanthropy). Philanthropy has been part of the implicit American social contract that continuously nurtures and revitalizes economic prosperity. Much of the new wealth created historically has been given back to the community to build many of the great social institutions that have paved the way for future economic growth. This entrepreneurship-philanthropy nexus has not been fully explored by either economists or the general public. The purpose of this paper is to suggest that American philanthropists—particularly those who have made their own fortunes—create foundations that, in turn, contribute to greater and more widespread economic prosperity through knowledge creation. Analyzing philanthropy sheds light on our current understanding of how economic development has occurred, as well as the roots of American economic dominance.

Democratic Capitalism and Philanthropy in a Global Economy

Democratic capitalism has become the popular paradigm in the modern world, and it is spreading further through globalization. It is a model based on growth, expansion and constant innovation. However, it is accompanied by social problems which may worsen despite overall gains in wealth. In this paper, we suggest that democratic capitalist societies may benefit from the application of what has been a primarily American institution: Philanthropy. We present the Entrepreneurship-Philanthropy Cycle, which demonstrates the relationship between wealthy entrepreneurs, philanthropic contributions and economic opportunity. As a nonmarket and nonstate mechanism, philanthropy is unique in its structure and operations, and may offer the ideal approach to solving social problems. We suggest that both the internationalization of American foundations, and the growth of domestic philanthropy, can help developing countries offset social problems.

Institutional Drivers of Informal Entrepreneurship

There is increasing scholarly interest in informal entrepreneurship. We empirically examine how institutions interact to influence the informal entrepreneurship. Using a novel multi-source dataset we test institutional drivers of informal entrepreneurship in 28 innovation-driven countries during 2004-2011. Our results show that cognitive institutions inhibit informal entrepreneurship. Contrary to received wisdom in the literature, we find no relationship between regulatory institutions, normative institutions and the rate of informal entrepreneurship in innovation-driven countries. We find that regulatory institutions moderate the influence of cognitive institutions on informal entrepreneurship. Our study on informal entrepreneurship advances knowledge on heterogeneous entrepreneurial outcomes.

Energy-Based Economic Development: Prioritizing Opportunities for Developing Countries

Energy-based economic development (EBED) can provide economic, social and environmental benefits related to national economic development and sustainable growth activities. As both policy and research interests in responsible mechanisms for economic development grow, EBED benefits are becoming increasingly attractive to planners in both developed and developing countries. The incentives, trade-offs, and payoffs for developing countries, however, are not well documented. To help address that gap, this paper identifies the general scope and role of EBED in a developing economy context, and outlines opportunities and challenges for decision-makers.Energy-based economic development (EBED) can provide economic, social and environmental benefits related to national economic development and sustainable growth activities. As both policy and research interests in responsible mechanisms for economic development grow, EBED benefits are becoming increasingly attractive to planners in both developed and developing countries. The incentives, trade-offs, and payoffs for developing countries, however, are not well documented. To help address that gap, this paper identifies the general scope and role of EBED in a developing economy context, and outlines opportunities and challenges for decision-makers.